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MUMBAI: Goldman Sachs in its analysis on possible strike at JLR's factories in Solihull, UK has commented that the staff unrest could be near-term negative for Tata Motors.

According to reports, production of Jaguar Land Rover cars in the UK may come to a grinding halt as delivery workers threaten to go on strike over demand for a wage hike.

DHL currently manages JLR's production supply chain, and is responsible for "just in time" and "just in sequence" delivery of components.

"Given the extensive nature of its involvement in JLR's operations, we think any contingency plan is unlikely to offset the impact of a complete stoppage of work by DHL's employees. We believe JLR could currently have about 2-3 weeks of inventory in the pipeline, with customers in some markets willing to wait for deliveries of certain models," the report said.

"Beyond the initial 2-3 weeks, we estimate that every week of lost production could impact JLR's FY14E revenue by about 2 per cent and earnings by about 2 per cent-4 per cent. In case of any structural change in JLR's staff or logistics costs resulting from this dispute, we estimate an impact of 2 per cent -3 per cent on JLR's FY14E-FY16E earnings," the report added.

According to the brokerage, Tata Motors' stock price could react negatively in the near term but continues to remain positive on the unfolding product cycle at JLR.

"However, we note that in previous instances of labour unrest in the Indian auto sector, stock prices have recovered with resumption in normal operations, as the market looks beyond immediate disruptions. We continue to remain positive on the unfolding product cycle at JLR. Our estimates and 12-m target price are unchanged," the report concluded.